Cubesmart · NYSE:CUBE
Cubesmart — Investor Presentation (June 2020)
30 slides from Cubesmart's investor presentation, June 2020
Slide 1: CubeSmart June 2020
CuseSMaRT June 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement The forward-looking statements contained in this presentation are subject to various risks and known and unknown uncertainties. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assur
Slide 3: Company at a glance
1. As of March 31, 2020 3. Period ending December 31, 2019 2. Market value of common equity and book value of debt as of December 31, 2019 4. Annual dividends declared in period ending December 31, 2019
Slide 4: Arrival of current management team
Moved Received Grew the portfolio by over Arrival of current headquarters to Rebranded Investment Grade $1.6 billion through management suburban company as credit rating from acquisitions and team Philadelphia CubeSmart Moody’s and S&P developments Acquired United Acquired 22 Began capital Stor-All
Slide 5: Value Creation Strategy
Value Creation Strategy Generate sustainable growth to maximize long-term shareholder value — Building an industry leading platform to generate outsized growth from our high quality portfolio, maximizing long term shareholder value 5| CuBESMART’ rah Reo E> Attractive Industry Experienced Management
Slide 6: Self-storage has been a top performing REIT sector
Self-storage has been a top performing REIT sector through all phases of the economic cycle with 10-year returns averaging 17%1 Greatest diversity of customer base of any REIT Sector, averaging over 650 customers per store Month-to-month rentals allow for rapid repricing in response to changing econ
Slide 7: Attractive fundamentals have driven continued evolution of the industry
Attractive fundamentals have driven continued evolution of the industry New Supply Strong historical returns have led to increased | Continued growth i in awareness & utilization new development across many core markets has increased demand for the product Favorable returns have been driving private
Slide 8: COVID-19 operating update
• Multiple ways to continue • As a designated “essential serving our customers with business” all stores 100% of rentals now remained open contactless • Same-store occupancy • Launched SmartRentalTM, our ended May at 93.1% fully online rental process • Up 10 bps from May 2019 • SmartRentalTM usage n
Slide 9: Senior management team
• Chris has been CEO of CubeSmart since January 2014 • Currently the longest-tenured CEO in the sector • Joined the company in 2006, and previously served as Chief Operating Officer, Chief Investment Officer, and Chief Financial Officer • Currently serves on the board of NAREIT • Tim has been CFO of
Slide 10: Core operations and portfolio growth
• Execution on our core operations drove strong organic growth • Continued to grow the portfolio through all available avenues to maximize risk-adjusted returns for shareholders, including meaningful cash flow growth
Slide 11: Attracting the greatest share of potential demand
Attracting the Proprietary Building a Award winning greatest share of systems and foundation of customer service potential demand processes to proprietary platform delivers through dynamically solutions to an unparalleled continually generate pricing improve experience evolving digital decisions in
Slide 12: Sophisticated operating platform
• SEO-focused content creation • Website AB Testing • Optimized customer rate • Targeted local marketing efforts • Conversion funnel analysis and increase model • Exploratory marketing channels optimization by a team of data • Award winning customer service • Sophisticated brand scientists • Interna
Slide 13: Operating performance versus peers
1. Reported average full-year metrics for the other three largest publicly-traded storage REITs by market cap from January 1, 2014 through December 31, 2019
Slide 14: Portfolio concentration by market
Boston 2% NY/NJ/LI Chicago 21% Staten Island 7% Phila. 0.4% 3% Wash DC Queens 7% 4% North NJ 5% Brooklyn Long Island So. CA 3% 2% 3% Westchester Bronx 2% Atlanta 5% Phoenix 3% 3% Dallas 6% States with Owned Stores Houston Orlando 2% 2% States with Managed Stores Only Percentages represent % of total
Slide 15: Portfolio quality and market positioning
1. Source: Bank of America Merrill Lynch Research Report dated January 9, 2019 2. Source: Evercore ISI Research Report dated November 13, 2019
Slide 16: High population density creates a strong demand profile
High population density Renters boost demand NYC square foot per creates a strong as renters are 3.9x capita is substantially demand profile around more likely to move lower than the industry our stores than homeowners average 1 1 2 00 1. Source: CubeSmart 3-mile portfolio demographics 2. CubeSmart
Slide 17: NYC zoning and development restrictions
• In 2017, NYC passed a zoning amendment that required a special permit for self-storage to be built in the “Industrial Business Zones” • The IBZs reduced the land that was previously zoned by- right for storage by 49%1 • NYC recently excluded all self-storage development from eligibility under the
Slide 18: Focus on markets with strong demographics
Focus on markets with strong demographics to drive long- term value Build and acquire Class-A properties in core infill locations by leveraging local developer expertise Invest with partners to expand national footprint and improve returns for lease-up opportunities Expand scale of platform, generat
Slide 19: Development projects projected to create value
Our development projects are 11 Projects 3 Projects 2 Projects 2 Projects projected to create over $310 million in value at stabilization1 2 Projects 1 Project 1 Project 1 Project 1. Proforma based on stabilized NOI projections and current market cap rates
Slide 20: Joint venture investments
Strong returns through levered structures and promotes Opportunity to purchase assets at the end of the hold period Fee revenue increases our return profile Market and cash flow diversification Mitigate dilution of lease-up properties 35 properties 21 properties 13 properties 14 properties $315.7 mi
Slide 21: Joint venture strategic goals and portfolio sale
• Our participation as a 10% owner in venture accomplished a number of strategic goals: • Expanded relationship with our JV partner • Participated in portfolios with a mix of assets • Boosted returns through fee income • Shared in value creation through promoted returns • Acquired stores that fit ou
Slide 22: Third-party management platform
stores on the CubeSmart management has grown to the second largest platform1 national management platform4 as we continue to expand our national footprint and brand while increasing efficiency anagement Fees from the management business contribute fees2 meaningfully to FFO growth The management plat
Slide 23: Baa2 senior unsecured rating
CubeSmart’s Baa2 senior unsecured rating reflects the REIT’s good financial flexibility and modest use of leverage. - Moody’s Investors Service 1. Source: Company Filings, as of December 31 of each stated year 2. Calculated as annual EBITDA / Interest Expense
Slide 24: Ample liquidity to manage near-term capital needs
Ample liquidity to manage near-term capital needs Proven ability to access a variety of sources of capital, raising $4.2 billion since 2010 • Capital Needs: $123.6M through 2021 • $55.7M of debt maturities • Common Equity: raised $1.4 billion in net proceeds • $67.9M of remaining development commitm
Slide 25: Environmental initiatives
Since 2015, CubeSmart has completed Since 2010, CubeSmart has installed 76 lighting retrofits at 134 owned stores in energy management systems at owned 17 states and DC. These lighting stores to monitor and control a store’s upgrades save approximately 150,000 energy usage which decreased electricit
Slide 26: Engaging with our Customers, Teammates and Communities
Engaging with our Customers, Teammates and Communities Charitable Donations 2 Investments in Our Teammates | Establishment of programs designed to increase Teammate Match employee contributions to charitable engagement, recognition and development organizations through our Gift Matching Program ha,
Slide 27: Corporate governance
• Annual election of trustees • Separate position of Board • Share ownership guidelines for • Annual say-on-pay votes Chair & Chief Executive executive officers and trustees • Single voting class of stock Officer • Anti-hedging & anti-pledging • Shareholder right to call special • Regular executive
Slide 28: First quarter 2020 financial data
1. Financial Data from January 1, 2020 through March 31, 2020 3. As of April 30, 2020 2. As of March 31, 2020
Slide 29: Historical performance and valuation metrics
1. Performance as reported for the same-store pool as it was constituted at the end of the respective year 2. Year-ending values as detailed in Company's supplemental packages 3. Calculated as ending common share price / funds from operations per share, as adjusted. Please refer to CubeSmart’s publi
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